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What managers can learn from death on the roads

By Arthur Goldstuck

There was one positive outcome of the unacceptably high death toll on South Africa’s roads during the last holiday season. Finally, the media and the public put pressure on the government official responsible for our roads, namely Transport Minister Dullah Omar, to do something about this ongoing national tragedy, and something that amounts to more than a marketing campaign for lower speeds.

It is almost silly to remind anyone that more then three times as many people die on our roads every year than the number of people killed in the attacks on the United States on 11 September 2001. But that indicates the urgent need to do something serious, radical and visionary about the problem.

Unfortunately, most of the noise around the issue has been about speed and drivers’ licenses. While these are major factors, and a system of demerits will do far more about speeding than gratuitously fining anybody who breaks the rules, reducing speed and creating a real punishment for these crimes will not address the real issue.

Talk to any representative of institutions for advanced drivers, and they will tell you that the single most common factor in road deaths is unsafe following distances. Yet, nowhere in any of the press statements made by Mr Omar has this even been mentioned. And anyone who has learned to keep a safe following distance – internationally accepted as 3 seconds behind the car ahead of you, regardless of the speed – will know from all the idiots driving right on their tails that this is an alien concept to most South African drivers – whether they drive Corollas, mini-buses or expensive BMWs (in fact, especially if they drive expensive BMWs).

The reason for the 3 second rule is simple: with that kind of time to take a decision if the car ahead suddenly stops or runs into problems, chances are you will avoid a collision. The moment you are driving on someone’s tail, you become an intimate part of any difficulties into which they might run. Think pile-up. Think wreckage. Think hospitals and morgues.

For this reason, most advanced driver courses focus on the concept of collision avoidance, long before they get to the cool stuff like skid pans and doing a 180 degree turn at full speed on a wet road. There’s no point being able to drive like James Bond if you don’t know how to avoid hitting the guy in front of you.

What has this got to do with managers and information technology projects? Everything! The same mindset that prevents our authorities from focusing on the real issues in what is a daily crisis prevents management of large organisations from focusing on the real issues in what is perceived as an IT market slump.

Everyone blames the market for the IT slump, and few IT companies blame themselves. One of the reasons for that is that they are riding so close to the rear tail-lights of their potential customers, they are not giving themselves time to react to trouble up ahead. So when the market goes into free-fall, they don’t realise it until their customers come to a sudden halt in new IT investment. The supplier then, figuratively, smashes at high speed into the rear end of the customer’s sudden procurement stop. The damage is often so severe, their very survival is under threat. A classic South African example, SDD, was so focused on its resellers, it had no hope of noticing the changing market conditions beyond the reseller channel. In other words, it was a case of being so far up the rear end of the channel, it couldn’t see the other side.

Where manufacturers or suppliers do survive the crash, they are often not in a position to begin resupplying the customer when the market recovers. This in turn is often because the customer’s needs have evolved in response to a changed environment while, in many cases, the supplier’s products are still stuck in pre-crash mode.

It is not that the market slump is such a huge threat to an IT company – it is that it does not recognize the oncoming traffic that represents the changing needs of the market.

Alternatively, companies look to their share prices as the barometers of their businesses – when they are usually only barometers of market sentiment. Sentiment takes a sudden turn, the share price crashes, and the company believes itself to be in deep trouble. If it was relying on the share price instead of real money to reward workers and make acquisitions, then it is indeed in trouble. A change in the stock market atmosphere becomes the fog on the road that causes multiple vehicle pile-ups.

The way companies often respond to such changes is to fire the workers – think anyone from General Electric to Lucent – or to dump the CEO – think Steve Case, recently prized out of the wreckage at AOL Time-Warner.

Is there an alternative? Well, there is the much-maligned Microsoft, it’s share price at the beginning of 2003 at half the level it was two years earlier. You don’t see Microsoft panic, wrenching the wheel and veering off the road, or coming to such a sudden halt in research and development investment that the CEO flies head-first through the front windscreen.

You see, instead, a company that forges ahead with its chosen strategy, works the market as hard as it can to retain major and minor clients, works at entrenching its competitive position vis-a-vis challengers like Linux, and reinvents itself to take account of the maturity and changing needs of the market. If necessary, it even reinvents the market.

But to do all these things, it keeps its eyes on both its customers and the competition, both on current market realities and the future potential of the market. That way, it can avoid the mess when all around it are piling up and crashing. And you can only do that when you keep a safe following distance.

Arthur Goldstuck is editor of The Big Change and managing director of technology research organization World Wide Worx. He can be contacted on mailto:arthurg@internet.org.za

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The Big Change is a business strategy blog and newsletter published by Arthur Goldstuck, managing director of World Wide Worx, a leading technology research organisation based in Johannesburg, South Africa.

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